Despite NLRB ruling, Northwestern players are a long way away from a union.

Fellow #HRpuckhead John Jorgensen shared one of his wry witticisms on Facebook yesterday on the heels of the NLRB ruling that student athletes at Northwestern University were employees, and entitled to a vote to determine if they should be represented by a union for purposes of collective bargaining.

“I just love listening to sportscasters discuss labor law as if they know what they are talking about.”

John’s observation aside, there was some decent reporting and analysis out there, including this as reported by ESPN:

In a potentially game-changing moment for college athletics, the Chicago district of the National Labor Relations Board ruled on Wednesday that Northwestern football players qualify as employees of the university and can unionize.

NLRB regional director Peter Sung Ohr cited the players’ time commitment to their sport and the fact that their scholarships were tied directly to their performance on the field as reasons for granting them union rights.

Ohr wrote in his ruling that the players “fall squarely within the [National Labor Relations] Act’s broad definition of ’employee’ when one considers the common law definition of ’employee.'”

Ohr ruled that the players can hold a vote on whether they want to be represented by the College Athletes Players Association, which brought the case to the NLRB along with former Wildcats quarterback Kain Colter and the United Steelworkers union.

Game Changer or Delay of Game?

This release from Indiana University was also pretty good. They discuss the following issues:

A potential game changer for college athletics model
If upheld, decision could raise Title IX questions

Here’s a quick summary of the salient points

  • Football players weren’t viewed as being primarily student due to the fact they receive compensation and their coaches exercise a high degree of control over schedules.
  • The ruling only applies to students at private schools. Employees of state funded universities aren’t covered under the National Labor Relations Act.
  • Questions remain open if the facts applied to the analysis applied to football players would apply to all other student athletes under Title IX, as explained by Kenneth Dau-Schmidt, the Willard and Margaret Carr Professor of Labor and Employment Law at the IU Maurer School of Law.

If this decision is upheld and college football players at private universities begin to organize, Dau-Schmidt added, there is a good question of how this system would work consistently with the Title IX requirement of equal athletic opportunities for women.

“Where there is a positive cash flow in college athletics, it’s usually associated with men’s football and basketball, not other sports. At the bigger schools, men’s football and basketball revenue supports the other athletic programs. Would Title IX mean that the football players have to negotiate benefits for all athletes and not just themselves? That would make for a very curious system of collective bargaining.

Getting that first contract takes a long time

What no one has mentioned so far is this.  So far, all the players have done is win a ruling that they are entitled to vote to decide whether or not they want to be represented by a union.  Setting aside all other likely challenges, the NLRB still has to hold the election, and a majority of players will have to vote in favor of the union in order for them to win the right to bargain for a collective bargaining agreement.  And then they have to negotiate and agree to a collective bargaining agreement.

Initial collective bargaining agreements are notoriously difficult to obtain.  Many times, workers vote for a union and then never obtain a collective bargaining agreement.  In this situation, many of the current student athletes will have graduated and moved on into the real world by the time any contract is reached.  I know of one current situation where a Teamsters local has been bargaining for more than two years to get a first contract in a distribution warehouse. Just imagine how complex the negotiations for student athletes will be compared to that.

This story has a long way to go before we see how much of a game changer it actually will be, especially without a vote being held yet, and with the difficulties many unions face in obtaining initial contracts.

Employee Owned Businesses the New Future Model for US Business?

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This was originally written in December 2008.  It’s still worth a read and some consideration as a company business strategy.

Employee Owned Companies

In my career, I’ve worked for two employee-owned companies. Both were excellent employers.

Being employed by a company  you own a stake in makes a huge difference in the company culture. My mantra for 2009 is that company culture is ultimately the one reason that drives a business to excellence, superseding talent, compensation, visions, missions, innovation and any other reason you may throw out. Without a strong vibrant encouraging culture, none of these other factors can flourish.

Employee ownership is the single strongest differentiators in business, and is sorely under-utilized. I am not talking about employee stock purchase plans. I am talking about actually owning shares that you receive as part of your annual compensation.

This would do far more to help rebuild economies than a piece of adversarial legislation like the Employee Free Choice Act ever could. Business and employees don’t need 3rd party interveners and relationships based on adversarial negotiation. They are mutually engaged in seeking the best outcome for business success, in a way that serves the interest of all stakeholders.

Employee Stock Ownership Plans are one way of achieving this. I saw a really great story about such an example of this in a story from the Naples New this weekend.

In their own hands: Employees run the business at Florida Company

In a rare move to save his company, a dying man initiated a complex process
to put his 30-year venture into his employees’ hands.

Larry Bill had battled cancer for years and needed to address Pelican
Wire Co.’s future without himself at the helm.

There were potential buyers, including a Chinese company, said Ted
Bill, his son and company president.

Instead, the Bill family embarked on a nearly nine-month process of
transferring ownership to Pelican’s 48 employees in an employee stock ownership
plan, or ESOP, which Ted Bill referred to as expensive, although no figures were
disclosed.

The transaction was completed this fall, about six months after Larry
Bill died.

“He always had a passion for the employees,” Ted Bill said. “He wanted
them to come to work feeling like they had an ownership stake.

Employee Owned Businesses the New Future Model for US Business?

Work looks different when you’re an owner

Worker owned companies are better

Over the course of my career I’ve been privileged to work at some excellent companies. Three of them, Texas Instruments, Andersen Windows, and my current employer Publix all had plans that allowed the employees to own an interest in the company via stock or an ESOT or profit-sharing. These companies shared some common elements.

They were profitable, and high performing. The employees were committed and engaged. The cultures were viewed as enviable. The ownership aspect may not have been the only driver of this success, but it is certainly a major contributor.

When you are an employee AND an owner, it makes the workplace look different. I can attest personally, it makes you think differently about how you treat company resources.

Skin in the game makes you a better player for the team.

I was reminded of this when I saw this headline from the LaCrosse Tribune, Badger Corrugating hands over 40 percent ownership to workers.

Check out why the owner gave nearly half the family to his employees:

ESOPs are an increasingly common tool used by businesses to spur growth, save on taxes and get workers more involved in decision-making, said Mary Jo Werner, a CPA and partner with Wipfli in La Crosse.

The plans serve as an option for retirement savings, giving employees a nest egg to hold and sell when they leave the company. Nearly 10.3 million workers in the United States share ownership in their company through an ESOP, including employees at the La Crosse-based grocer Festival Foods.

A percentage of a business’ profits are not taxed with an ESOP, equal to the percentage of the company owned by workers. Tax savings are reinvested into the company.

Ownership can change a worker’s feelings about the fate of the company, engaging them and inspiring teamwork. That kind of attitude adjustment is another potential boon for ESOP businesses, Werner said.

“If you have a stake in the outcome, if you’re an owner in something, you’ll work a little harder,” Werner said. “Be a little more mindful of what opportunities there are for the company.”

Sounds like pretty good advice. Maybe more companies should look at this strategy in the future. There are plenty of great companies to benchmark against. check out this list of great employers from the National Center for Employee Ownership.